Oct. 8 (Bloomberg) -- Hyundai Motor Co. and affiliate Kia
Motors Corp. forecast sales in China will exceed their targets
as South Korea’s two largest carmakers benefit from a wave of
anti-Japan protests in the world’s largest vehicle market.

The two carmakers will probably sell more vehicles in 2012
than the 1.25 million they had projected, Seoul-based Hyundai
Motor said in a statement yesterday. Combined deliveries rose to
127,827 units last month, or 9.5 percent higher than the
previous record set a year earlier, it said.

Non-Japanese brands stand to gain as Chinese consumers shun
products from Toyota Motor Corp. to Sony Corp. after a
territorial dispute escalated last month, when Japan decided to
purchase a group of islands claimed by both countries. JPMorgan
Chase & Co. economists warned last week the political row
between Asia’s two largest economies will cause Japan’s gross
domestic product to contract this quarter.

“Although the China sales results are definitely good news
for Hyundai and Kia as a whole, the benefits from the anti-Japan
movements aren’t likely to last long,” said Lee Sang Hyun, an
analyst at NH Investment & Securities Co. “Also, Japanese
automakers that resume production today will try to make up
their losses.”

Production in China is typically shut down for the annual
so-called Golden Week holiday that started Oct. 1 this year.

The China gains failed to impress investors as Hyundai
Motor shares fell for a fourth day, dropping 2.1 percent to
237,500 won at the close in Seoul trading. Macquarie Group Ltd.
analysts wrote last week third-quarter deliveries worldwide at
Hyundai Motor and Kia were about 4 percent lower than expected.

Tumbling Sales

Nissan Motor Co., which has the highest market share in
China among Japanese carmakers, saw September sales fall about
35 percent, while Toyota plans to cut October production 50
percent from a year earlier, the Mainichi newspaper reported
Oct. 6, without saying where it got the information.

Mazda Motor Corp. reported Oct. 4 deliveries in the country
tumbled 35 percent to the lowest in 19 months, while Mitsubishi
Motors Corp. said a day later that Chinese sales plunged 63
percent.

In September, traditionally a major shopping season in
China, Hyundai Motor and Kia sales in the country were driven by
the Langdong and K2 models, respectively, according to
yesterday’s statement. Deliveries at Hyundai Motor increased 15
percent to 84,188 units, and climbed to 43,639 units from 43,508
units at Kia.

Hyundai Motor’s third Chinese plant, which opened earlier
this year, may help the company increase production and sell
more vehicles in China, though Kia won’t be able to expand much
further because its plants in the country are already operating
at full capacity, NH Investment’s Lee said.

GM Sales

Not all non-Japanese brands capitalized on the protests.
General Motors Co. reported September sales rose 1.7 percent
from a year earlier to 244,266 units, slowing from the 7.3
percent surge the previous month. Sales of Buicks declined 1.8
percent while those of Cadillacs fell 8.3 percent, GM said.

Japanese vehicle manufacturers cut output in China in
August and officials at the companies said sales and production
were poised to deteriorate in September amid the deepening
territorial row which has become the worst diplomatic crisis
between the two nations since 2005, when thousands of Chinese
protested Japanese textbooks that downplayed wartime atrocities.

The dispute escalated when Japan said Sept. 11 that it
would purchase the islands, known as Diaoyu in China and Senkaku
in Japan, from a private owner.

Nissan, Mazda

Nissan expects anti-Japanese sentiment to hit September
sales, Executive Vice President Takao Katagiri said on Oct. 5.
The company will weigh the impact of the Chinese protests before
deciding whether to revise its sales target there, Katagiri
said.

Japan’s three largest automakers plan to cut production to
half of normal levels in China, the Nikkei newspaper reported
today.

Mazda, the first Japanese automaker to report China sales,
said on Oct. 4 deliveries in China dropped to 13,258 vehicles,
meaning the company didn’t even match its sales during the
aftermath of last year’s tsunami in Japan and floods in
Thailand. Mitsubishi’s Chinese sales last month were the lowest
since at least April 2011, when the company changed the way it
counts China deliveries, spokesman Kai Inada said on Oct. 5.